Good morning Investors! Though "Old Energy" has done quite well for our Members over the last few years, no single sector has made as much money for our folks as has the renewed clean and green energy of the future: nuclear. Get ready for act two of the Nuclear Bull Market!
This past week I caught up with my long-time friend Scott Melbye to discuss the first phase of the bull market to date, especially in uranium specifically. Its spot price has moved from a low of around $18/pound to well over $100/pound some months back; since, it has fluttered slowly down to a recent range of, roughly, $70-$80/pound.
Yet as I opine and Scott seconds in THIS VERY MEATY AND EXCITING FORECAST, this consolidation has set up the "Second Act" for a generational bull market in uranium and nuclear energy that is every bit as bullish today as when uranium was bottoming.
What you will hear in this very wide-ranging missive is why I have recently started bumping back up our overall allocation to uranium and nuclear energy technologies after having pared back--at nice profits--some holdings over recent months.
And it's why this particular commodity story is among my top three for the near-medium term, even as commodities in general are in renewed danger for a while.
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Speaking of "very meaty," I have a second such offering for you as we get into the pre-Christmas weekend, as promised: an especially important "long form" with Mike Fox of The Prospector News.
You can listen to that one RIGHT HERE (or by clicking the below graphic.)
From the show notes as Mike posted them, we cover:
Economic Challenges
• Significant national debt and rising inflation are expected to impact Trump's pro-growth agenda
• The bond market is seen as a crucial indicator of the economic situation, with bond market vigilantes re-emerging.
• A potential government shutdown looms due to disagreements over the spending bill (NOTE: In a bit of semi-good news, the "price" America had to pay for the deal that was struck late today was far less bad than things looked initially; but it remains clear that The Swamp and the Washington Uniparty won't go away quietly.)
Federal Reserve and Interest Rates
• The Fed futures market predicts fewer rate cuts for 2025 than previously anticipated
• Long-term bond yields are increasing, signaling rising inflation expectations contrary to Federal Reserve projections
Trump's Policies and Their Impact
• Trump's mercantilist policies, including tariffs, could lead to inflation and conflict with Federal Reserve policies
• The administration aims for greater US self-sufficiency, particularly in energy production
• Deregulation is a key focus of Trump's economic strategy
Tariffs and the US Economy
• Tariffs are expected to have a negative impact on American consumers, especially those purchasing imported goods (NOTE: Yours truly necessarily here pushes back on one of Trump's campaign assertions, comparing himself to President William McKinley and that president's effective use of tariffs. Sorry, Mr. President: BIG-TIME "apples and oranges" in a couple KEY respects.)
• The US electric vehicle industry may struggle to compete with China due to higher costs
Government Spending and Shutdown
• Chris Temple suggests that a temporary government shutdown could be beneficial for reining in excessive spending
• He draws parallels to the Clinton era when budget deficits were reduced following shutdowns (NOTE: Regrettably, not the case today!)
The discussion concludes with the observation that markets are beginning to recognize the economic realities and challenges facing the Trump administration.
And one more note: Among some other things not specifically mentioned above, we also discussed China, which--together with the Fed and its evolving policies that will be at odds with Trump--represents a second major challenge to Trump 2.0.
Indeed, as I have said in several recent podcasts and interviews--and will continue to--there is tremendous economic and market risk in the fact that the world's two largest and most important economies are at such polar ends of the "Flation" equation.
So, not to be a "Scrooge" (as Fire Marshall Jay was this past week), but I had to point out as Mike and I concluded that, generally, I expect risk assets to be in some danger in the near term pretty much across the board.
And in the newest regular issue for our Members I'll be sending out shortly, I'll discuss how and when we'll be making some more notable changes to our allocations beyond those of recent days.
All the best,
Chris Temple
Editor/Publisher
Saturday morning, December 21, 2024
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